Intel Corporation today reported second-quarter revenue of $12.8 billion, operating income of $2.7 billion, net income of $2.0 billion and EPS of $0.39. The company generated approximately $4.7 billion in cash from operations, paid dividends of $1.1 billion, and used $550 million to repurchase 23 million shares of stock.

“In the second quarter, we delivered on our quarterly outlook and made several key product announcements,” said Intel CEO Brian Krzanich. “In my first two months as CEO, I have listened to a wide variety of views about Intel and our industry from customers, employees and my leadership team and I am more confident than ever about our opportunity as a company.”

“Looking ahead, the market will continue buying a wide range of computing products,” he added. “Intel Atom and Core processors and increased SOC integration will be Intel's future. We will leave no computing opportunity untapped. To embrace these opportunities, I've made it Intel's highest priority to create the best products for the fast growing ultra-mobile market segment.”

Q2 Key Financial Information and Business Unit Trends

PC Client Group revenue of $8.1 billion, up 1.4 percent sequentially and down 7.5 percent year-over-year.

For additional information regarding Intel’s results and Business Outlook, please see the CFO commentary at: www.intc.com/results.cfm.

Status of Business Outlook

Intel’s Business Outlook is posted on intc.com and may be reiterated in public or private meetings with investors and others. The Business Outlook will be effective through the close of business September 13 unless earlier updated; except that the Business Outlook for amortization of acquisition-related intangibles, impact of equity investments and interest and other, and tax rate, will be effective only through the close of business on July 24. Intel’s Quiet Period will start from the close of business on September 13 until publication of the company’s third-quarter earnings release, scheduled for October 15, 2013. During the Quiet Period, all of the Business Outlook and other forward-looking statements disclosed in the company’s news releases and filings with the SEC should be considered as historical, speaking as of prior to the Quiet Period only and not subject to an update by the company.

Risk Factors

The above statements and any others in this document that refer to plans and expectations for the third quarter, the year and the future are forward-looking statements that involve a number of risks and uncertainties. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “may,” “will,” “should” and their variations identify forward-looking statements. Statements that refer to or are based on projections, uncertain events or assumptions also identify forward-looking statements. Many factors could affect Intel’s actual results, and variances from Intel’s current expectations regarding such factors could cause actual results to differ materially from those expressed in these forward-looking statements. Intel presently considers the following to be the important factors that could cause actual results to differ materially from the company’s expectations.

Demand could be different from Intel's expectations due to factors including changes in business and economic conditions; customer acceptance of Intel’s and competitors’ products; supply constraints and other disruptions affecting customers; changes in customer order patterns including order cancellations; and changes in the level of inventory at customers. Uncertainty in global economic and financial conditions poses a risk that consumers and businesses may defer purchases in response to negative financial events, which could negatively affect product demand and other related matters.

Intel operates in intensely competitive industries that are characterized by a high percentage of costs that are fixed or difficult to reduce in the short term and product demand that is highly variable and difficult to forecast. Revenue and the gross margin percentage are affected by the timing of Intel product introductions and the demand for and market acceptance of Intel's products; actions taken by Intel's competitors, including product offerings and introductions, marketing programs and pricing pressures and Intel’s response to such actions; and Intel’s ability to respond quickly to technological developments and to incorporate new features into its products.

The gross margin percentage could vary significantly from expectations based on capacity utilization; variations in inventory valuation, including variations related to the timing of qualifying products for sale; changes in revenue levels; segment product mix; the timing and execution of the manufacturing ramp and associated costs; start-up costs; excess or obsolete inventory; changes in unit costs; defects or disruptions in the supply of materials or resources; product manufacturing quality/yields; and impairments of long-lived assets, including manufacturing, assembly/test and intangible assets.

The tax rate expectation is based on current tax law and current expected income. The tax rate may be affected by the jurisdictions in which profits are determined to be earned and taxed; changes in the estimates of credits, benefits and deductions; the resolution of issues arising from tax audits with various tax authorities, including payment of interest and penalties; and the ability to realize deferred tax assets.

Gains or losses from equity securities and interest and other could vary from expectations depending on gains or losses on the sale, exchange, change in the fair value or impairments of debt and equity investments; interest rates; cash balances; and changes in fair value of derivative instruments.

Intel's results could be affected by adverse economic, social, political and physical/infrastructure conditions in countries where Intel, its customers or its suppliers operate, including military conflict and other security risks, natural disasters, infrastructure disruptions, health concerns and fluctuations in currency exchange rates.

Expenses, particularly certain marketing and compensation expenses, as well as restructuring and asset impairment charges, vary depending on the level of demand for Intel's products and the level of revenue and profits.

Intel’s results could be affected by the timing of closing of acquisitions and divestitures.

Intel's results could be affected by adverse effects associated with product defects and errata (deviations from published specifications), and by litigation or regulatory matters involving intellectual property, stockholder, consumer, antitrust, disclosure and other issues, such as the litigation and regulatory matters described in Intel's SEC reports. An unfavorable ruling could include monetary damages or an injunction prohibiting Intel from manufacturing or selling one or more products, precluding particular business practices, impacting Intel’s ability to design its products, or requiring other remedies such as compulsory licensing of intellectual property.

A detailed discussion of these and other factors that could affect Intel’s results is included in Intel’s SEC filings, including the company’s most recent reports on Form 10-Q and Form 10-K.

Earnings Webcast

Intel will hold a public webcast at 2 p.m. PDT today on its Investor Relations website at www.intc.com. A webcast replay and MP3 download will also be available on the site.

Intel plans to report its earnings for the third quarter of 2013 on October 15, 2013. Immediately following the earnings report, the company plans to publish a commentary by Stacy J. Smith, executive vice president and chief financial officer, at www.intc.com/results.cfm. A public webcast of Intel’s earnings conference call will follow at 2 p.m. PDT at www.intc.com.

Starting with the third-quarter earnings announcement on October 15, 2013, the company plans to post its quarterly earnings results on its Investor Relations website, at www.intc.com/results.cfm, and no longer distribute quarterly financial details through a news wire service. The company may choose to issue other financial-related news through a news wire service in addition to its Investor Relations website.

About Intel

Intel (NASDAQ: INTC) is a world leader in computing innovation. The company designs and builds the essential technologies that serve as the foundation for the world’s computing devices. Additional information about Intel is available at newsroom.intel.com and blogs.intel.com.

Intel, the Intel logo, Atom and Core are trademarks of Intel Corporation in the United States and other countries.

*Other names and brands may be claimed as the property of others.

INTEL CORPORATION

CONSOLIDATED SUMMARY STATEMENT OF INCOME DATA

(In millions, except per share amounts)

Three Months Ended

Six Months Ended

Jun 29,

Jun 30,

Jun 29,

Jun 30,

2013

2012

2013

2012

NET REVENUE

$

12,811

$

13,501

$

25,391

$

26,407

Cost of sales

5,341

4,947

10,855

9,588

GROSS MARGIN

7,470

8,554

14,536

16,819

Research and development

2,516

2,513

5,043

4,914

Marketing, general and administrative

2,165

2,131

4,112

4,104

R&D AND MG&A

4,681

4,644

9,155

9,018

Amortization of acquisition-related intangibles

70

78

143

159

OPERATING EXPENSES

4,751

4,722

9,298

9,177

OPERATING INCOME

2,719

3,832

5,238

7,642

Gains (losses) on equity investments, net

11

47

(15)

28

Interest and other, net

(37)

55

(87)

78

INCOME BEFORE TAXES

2,693

3,934

5,136

7,748

Provision for taxes

693

1,107

1,091

2,183

NET INCOME

$

2,000

$

2,827

$

4,045

$

5,565

BASIC EARNINGS PER COMMON SHARE

$

0.40

$

0.56

$

0.82

$

1.11

DILUTED EARNINGS PER COMMON SHARE

$

0.39

$

0.54

$

0.79

$

1.07

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

BASIC

4,978

5,022

4,963

5,010

DILUTED

5,106

5,199

5,093

5,196

INTEL CORPORATION

CONSOLIDATED SUMMARY BALANCE SHEET DATA

(In millions)

Jun 29,

March 30,

Dec 29,

2013

2013

2012

CURRENT ASSETS

Cash and cash equivalents

$

3,778

$

5,698

$

8,478

Short-term investments

6,214

4,323

3,999

Trading assets

7,358

7,052

5,685

Accounts receivable, net

3,474

3,536

3,833

Inventories:

Raw materials

487

451

478

Work in process

2,220

2,129

2,219

Finished goods

1,835

1,778

2,037

4,542

4,358

4,734

Deferred tax assets

2,121

2,109

2,117

Other current assets

1,561

1,601

2,512

TOTAL CURRENT ASSETS

29,048

28,677

31,358

Property, plant and equipment, net

29,345

28,418

27,983

Marketable equity securities

5,361

4,698

4,424

Other long-term investments

1,642

1,309

493

Goodwill

10,005

9,756

9,710

Identified intangible assets, net

5,620

5,807

6,235

Other long-term assets

4,640

4,418

4,148

TOTAL ASSETS

$

85,661

$

83,083

$

84,351

CURRENT LIABILITIES

Short-term debt

$

263

$

88

$

312

Accounts payable

2,864

2,654

3,023

Accrued compensation and benefits

1,981

1,501

2,972

Accrued advertising

1,060

987

1,015

Deferred income

1,971

1,901

1,932

Other accrued liabilities

3,250

4,667

3,644

TOTAL CURRENT LIABILITIES

11,389

11,798

12,898

Long-term debt

13,150

13,143

13,136

Long-term deferred tax liabilities

3,709

3,427

3,412

Other long-term liabilities

3,573

3,521

3,702

Stockholders' equity:

Preferred stock

—

—

—

Common stock and capital in excess of par value

20,678

20,098

19,464

Accumulated other comprehensive income (loss)

145

(410)

(399)

Retained earnings

33,017

31,506

32,138

TOTAL STOCKHOLDERS' EQUITY

53,840

51,194

51,203

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

85,661

$

83,083

$

84,351

INTEL CORPORATION

SUPPLEMENTAL FINANCIAL AND OTHER INFORMATION

(In millions)

Q2 2013

Q1 2013

Q2 2012

CASH INVESTMENTS:

Cash and short-term investments

$9,992

$10,021

$9,204

Trading assets - marketable debt securities

7,358

7,052

4,444

Total cash investments

$17,350

$17,073

$13,648

CURRENT DEFERRED INCOME:

Deferred income on shipments of components to distributors

$770

$705

$765

Deferred income from software and services group

1,201

1,196

1,150

Total current deferred income

$1,971

$1,901

$1,915

SELECTED CASH FLOW INFORMATION:

Depreciation

$1,712

$1,682

$1,572

Share-based compensation

$292

$295

$280

Amortization of intangibles

$279

$382

$267

Capital spending

($2,723)

($2,174)

($2,662)

Net cash (used)/received for acquisitions/divestitures

($286)

($98)

($282)

Investments in non-marketable equity instruments

($90)

($35)

($79)

Stock repurchase program

($550)

($533)

($1,100)

Proceeds from sales of shares to employees & excess tax benefit

$612

$466

$552

Dividends paid

($1,123)

($1,114)

($1,057)

EARNINGS PER COMMON SHARE INFORMATION:

Weighted average common shares outstanding - basic

4,978

4,948

5,022

Dilutive effect of employee equity incentive plans

67

78

108

Dilutive effect of convertible debt

61

54

69

Weighted average common shares outstanding - diluted

5,106

5,080

5,199

STOCK BUYBACK:

Shares repurchased

23

25

41

Cumulative shares repurchased (in billions)

4.3

4.3

4.2

Remaining dollars authorized for buyback (in billions)

$4.2

$4.8

$7.5

OTHER INFORMATION:

Employees (in thousands)

106.0

105.4

102.8

INTEL CORPORATION

SUPPLEMENTAL OPERATING GROUP RESULTS

(In millions)

Three Months Ended

Six Months Ended

Jun 29,

Jun 30,

Jun 29,

Jun 30,

2013

2012

2013

2012

Net Revenue

PC Client Group

$

8,100

$

8,754

$

16,092

$

17,253

Data Center Group

2,743

2,734

5,328

5,139

Other Intel Architecture Group

942

1,108

1,920

2,183

Software and Services Group

610

586

1,198

1,157

All other

416

319

853

675

TOTAL NET REVENUE

$

12,811

$

13,501

$

25,391

$

26,407

Operating income (loss)

PC Client Group

$

2,659

$

3,440

$

5,172

$

6,931

Data Center Group

1,230

1,365

2,309

2,500

Other Intel Architecture Group

(608)

(335)

(1,219)

(647)

Software and Services Group

(8)

14

(32)

21

All other

(554)

(652)

(992)

(1,163)

TOTAL OPERATING INCOME

$

2,719

$

3,832

$

5,238

$

7,642

In the first quarter of 2013, we completed a reorganization that transferred a portion of our wired connectivity business formerly included within the Data Center Group to the PC Client Group, as the technology from that portion of the business is primarily used for client connectivity. Prior period amounts have been adjusted retrospectively to reflect this new organization structure.